Dow Finally Reaches A New All-Time High

Well that didn’t take long! Stocks decided not to loiter just below all-time highs like we know they can. Instead, a strong rally on Thursday easily lifted two of the major indices into record territory.

Despite still being in a raging bull market, the Dow hadn’t made it to the top of the mountain since late January. But today it soared 0.95% (or about 250 points) to a new high of 26,656.98. The previous mark was at 26,616.71.

The S&P was just about 6 points away from history when the session began. It ended up gaining nearly 23 points, or 0.78%, to reach its own new record of 2930.75. Due to the soft start to September, it often felt like a long time since the index was in such rarefied air, but it had actually been less than a month (August 29).

The recent sluggishness of tech meant the NASDAQ has been trailing its counterparts for a few weeks, but the space really bounced back on Thursday thanks to a good day for FAANGs like Facebook (NASDAQ:FB) (+1.82%), Alphabet (NASDAQ:GOOGL) (+1.35%) Amazon (NASDAQ:AMZN) (+0.93%) and Apple (NASDAQ:AAPL) (+0.76%). The index had the best performance today on a percentage basis with a rise of 0.98% to 8028.2. It is now about 1% away from its own record at 8109.69.

Stocks are still loving the weaker-than-expected tariffs from both the U.S. and China earlier this week. Even though there’s still more than enough room for escalation (especially with President Trump suggesting another $267 billion in tariffs); the market, nonetheless, is deciding to accentuate the positive right now with hopes that these two economic powerhouses can work things out.

Economic data released on Thursday shows why the market is so desperate to put this trade issue in the past. First-time jobless claims fell by 3,000 last week to its lowest level since the year of Woodstock (the first one, that is, back in 1969). Also, the Philadelphia Fed manufacturing index nearly doubled in September from August. This is just further evidence that the economy remains strong and that these trade conflicts are an unwelcomed distraction.

Today's Portfolio Highlights:

Options Trader: There’s only 1 day of time left for those bull call spreads in CME Group (NASDAQ:CME) and it hasn’t yet made the maximum gain. It’s close, though. And as far as Kevin is concerned, it’s close enough to secure a double-digit return instead of risking that profit in a single day on a volatile stock that could go either way. Therefore, the editor sold to close the 3 Sept. 170 Calls AND bought to close the 3 Sept. 175 calls. These spreads brought a gain of nearly 71% to the portfolio in a little over three months. Kevin still likes CME, so don’t be surprised if he picks it up again in the future. The full write-up has more on today’s action.

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Surprise Trader: Don’t judge a stock’s upcoming report solely by its Earnings ESP. Sure, it's always great to see a huge number, but Dave reminds us that some of this portfolio’s best performers didn't have very impressive ESPs. He’s thinking that could be the case for financial data company FactSet Research (FDS), which has a positive ESP of only 0.68% for the report coming next Tuesday, September 25. The editor added FDS on Thursday with a 12.5% allocation and plans to buy again tomorrow. Read the full write-up for more.

Technology Innovators: Commvault (CVLT) provides Unified Data Management solutions for high-performance data protection, universal availability, and simplified management of data on complex storage networks. In simpler terms, it’s a cloud stock, which is favorite area for Brian Bolan and this portfolio. The stock’s most recent earnings surprise was a solid 33% and earnings estimates for this fiscal year and next are up in the past 60 days, underscoring its status as a Zacks Rank #1 (Strong Buy). The editor added CVLT on Thursday. Read the complete commentary for more.

Momentum Trader: Whenever a stock surges to the upside, you can bet that Dave is contemplating whether to buy it now as it continues to soar or to show some patience and wait for a pullback. Thursday’s addition of 21Vianet (VNET) is an example of the latter scenario. This Chinese Internet data center services company recently jumped to $11 from $5, but then pulled back to a floor of $8.50. The editor used the portfolio’s remaining cash allocation to buy VNET right here before the next turn higher. See the complete commentary for more.

All the Best,
Jim Giaquinto

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